Finance & Operations Committee budget report
|March 17, 2002|
This is the year that many have applied the phrase "mission threatening" to the budget. The Finance and Operations Committee subscribes to the belief that we are close to the edge, but that we are not there yet. This year, there are, with few exceptions, no good choices, only choices that balance services provided to one child with services provided to another. What follows is our recommendation, made not with any enthusiasm for the cuts, but with an acceptance that cuts must be made due to inadequate state funding. We do not so much "endorse" this budget as we accept it in line with Winston Churchill’s comment on Democracy: that it is the worst system devised by man with the possible exception of every other system devised by man.
As the Superintendent noted, there is approximately a $36,000,000 shortfall in funding for "current service levels." Although the District constantly reevaluates and modifies its services, this remains a fair basis for beginning the evaluation of the budget. We have had to accept a framework that clearly and unambiguously fails to maintain many of the services we believe are essential. But even within this problematic budget, we have been able to take small but significant steps forward in the areas of alternative education, fiscal accountability, and improving providing information about school choice and our budget to the citizens of Portland. We also have proposed preserving the Outdoor School, although not without cost on many levels. This budget, if adopted with the proposed amendments, continues to offer the hope that Portland Public Schools will deliver quality education to all its students for the coming year.Strategic Plan Emphasis
As with our deliberations last year, we conducted the analysis of the budget with an emphasis on what is best for the learning environment, and consideration of how each budget choice affected outcomes for children. We also tried to view each choice in terms of what it meant we might not, therefore, fund. In the coming months, the Finance and Operations Committee intends to return to this analysis as a primary area of our work. We wish to systematize a rigorous analysis within the educational side of the District regarding what we get from each program, each dollar spent on instruction, and whether it is being used as best possible. This analysis is already far along in the business departments of the District, and it is time to extend this important accountability mechanism.
As previously reported, the Finance and Operations Committee utilized a series a five screens, modified from last year’s four, which helped bring the core of the Strategic Plan into focus and apply it to our deliberations. Those screens were:
- Improving academics, particularly for early literacy and high school reform;
- Closing/eliminating the achievement gap;
- Increasing teacher effectiveness/improving professional development;
- Protecting the safety of staff and students; and
- Improving business and fiscal organization, flexibility and effectiveness.
There was a certain amount of difficulty in applying concepts aimed at growth and improvement to a declining resources situation, but the Committee believes that it kept these issues in mind throughout.Committee Process
The process the Committee used this year was immensely improved, primarily due to considerable work from staff in preparing issues papers on a wide variety of subjects. These issues papers helped better to frame the debate about comparative choices and inform the discussions. Credit should go to Interim Superintendent Jim Scherzinger for helping craft the process, for welcoming the increased interaction between staff and Board, and for providing leadership in an extremely difficult setting. In addition to Interim Superintendent Scherzinger, Bill Farver’s leadership in this matter was highly valuable. Excellent staffing for the committee was provided by Heidi Franklin, Lynn Ward and Dona Lehr, with assistance and issues papers from Pam Brown, Chet Edwards, Bob Honson, Steve Goldschmidt, Kerry Hampton, Ranee Neidermeyer and Scott Robinson. The Committee also thanks Terry Stonecipher, Shirley Crane and Jan McWilliams for their work in producing the budget document.
The Committee used the Interim Superintendent’s proposed budget as a starting point. Public process included eight caring community forums, three staff forums and four public hearings, all of which were well attended. We then requested input from specific staff, from the other members of this Board, and from the Citizens Budget Review Committee ("CBRC"), chaired by Tony Larson, as to proposals for either additions or subtractions from the basic format. As a result of the discussions, two changes will be presented to you on Monday by the Interim Superintendent. This in itself is a change from prior years and a positive one. In the past, we operated under a "the Superintendent proposes and the Board disposes" model. This year, there was a continuing give and take, and this allowed for staff to retool their basic proposal.
It should also be noted that the Committee is making its recommendations linking any changes in allocations specifically to funding sources, so that the proposals are as close as possible to revenue neutral. These will be presented as separate decision packages on Monday night. Staff proposals are similarly linked to identifiable funds and will also be presented as separate decision packages.Substantive Issues
- Accepted Items
The Committee will, few a handful of exceptions, omit any analysis of issues where it accepted the Interim Superintendent’s proposals. Included among the proposals accepted were:
- capping the District contribution to employee health premiums;* (* indicates an issue subject to collective bargaining)
- elimination of the 2002-03 cost of living increases to all staff;*
- implementation of administrative efficiencies;
- elimination of $4.5 million from the custodial budget, by contracting out or other negotiated savings;*
- closure of Wilcox and Youngson elementary schools;
- shortening of the 2002-03 work year;* and
- reduction of the Hola Hola/Moshi Moshi program through technical efficiencies and elimination of Moshi Moshi. The Japanese program is currently in use only at five schools (compared to 55 for the Spanish program), yet consumes approximately 1/3 of the total budget for these programs. Use is projected to decline to only four programs next Fall. The Committee does not object to perpetuation of the program through non-General Fund dollars, but cannot conclude that we are getting sufficient usage and sufficient learning for the dollars expended.
- Amendments from Staff
On Monday night, the Interim Superintendent will propose two significant changes to his own budget, which the Committee unanimously supports.
Alternative Education. Both staff and the Committee felt that it was important to restore some of the cuts made in the past to contract alternative education (dropout retrieval). These programs both increase funding to the District by retaining students who would otherwise drop out, and receive reimbursement, although the reimbursement comes in the next fiscal year. Last year, we were unable to find funds for this within the budget. This year, it was felt that this was an imperative. The recommendation restores 100 slots at a cost of $530,000. The resources for this come from funds set aside for charter operations that the District has sufficient cause to believe will not commence operations in 2002-03. In addition, if the availability of funds from this source increases, the committee and staff agree that 70 additional slots, at a cost of $370,000, would be reinstated.
The Committee has two subsidiary recommendations with this item. We believe that there is a need to examine whether alternative education slots are reaching all geographic areas of the District, particularly outer Southeast. This geographic discrepancy in service delivery needs to be analyzed and addressed. We also believe — although we did not suggest as a budget mandate — that there is a particular need for at least 50 of these restored slots to be directed to students in the middle school years. However, we are not proposing that the Board act on this, preferring to leave the allocation to staff. District staff should discuss the allocation criteria for the new slots with the Education Options Committee
Summer School. The Staff proposes to eliminate the use of general fund dollars from the summer school program, and to direct the focus of this program to the CIM Academy serving 5th-8th grade students. Absent the generation of new, outside sources of revenue, this would result in reduction of service to approximately 100 students. However, there is a good potential that the carryover of funds in this program will enable the District to reduce this shrinkage, and some increase in class size may further cut costs and allow for maintenance of service levels. In addition, there is a belief that this program is one that can compete for private funding in the community, and efforts should be undertaken to do so.
- Amendments from Committee – No staff position.
Staffing Level Allocation. The Committee had great concern over the issue of the proposed increase in the staffing ratio, and in particular over the issue of increasing the ratio to 30:1 from 28:1. We recognize that the actual average class size, due to Local Option funds, federal resources and other resources, is considerably lower — 23.5 in elementary schools, 23.4 in middle schools, and 23.7 in high schools. The staffing ratio has been commonly used to make year-to-year comparisons, and is a figure that the community is watching with care and concern. Accordingly, the Committee unanimously approved, and will be asking the Board to adopt on Monday, an amendment to the budget allocating, at a minimum, the $2,028,943 in Title II funds (formerly known as CSRI, or Class Size Reduction Initiative Funds) available to the District, across the board to all elementary schools other than those currently receiving funds for instructional specialists, with a goal of providing between 0.5 and 1.0 additional FTE to each school.
Citizens’ Budget and School Offerings Catalog. This is the third year that the Committee has sought to create a "citizens budget" that would be available to every stakeholder in the District. In addition, the Committee felt that, as we are a "district of choice," in that students are allowed to attend any school regardless of place of residence, and because the District lacks a comprehensive publication for prospective and current Portland Public Schools parents, we needed to improve the ability of children and their families to utilize those options by providing access to information about those options. The School Offerings Catalog would also provide information about applications, transfers, transportation, and answers to frequently asked questions relating to school selection. The Committee therefore proposes allocating $100,000 for a joint citizens budget/school offerings publication that would be widely distributed each year and help in both of these areas. Funding for this program would come from a cut in the same amount in the Human Resources budget, which was a department that experienced offsetting reductions and additions in the proposed budget. While the Committee recognizes the value of the work done in this department, and hopes that it will continue to evolve, particularly in the delivery of staff development programs, we believe there is an ability to deliver service here with this slight reduction.
- Amendments from the Committee – Staff does not recommend.
Outdoor School. The Committee recommends retention of the Outdoor School program by a vote of two-to-one. The dissenting vote (Wenzel) is not based on program analysis, but on the short time line and the lack of a public hearing for the major proposed sources of funding — closure of the Green Thumb program. This elimination was before the public in the past two budget cycles. On March 8th and 14th, the Finance and Operations Committee received information from staff about the Green Thumb program and discussed the resources allocated to this program and other special programs. The committee majority believes that interested parties have had adequate notice and opportunity for input, and that the comparative merits of Outdoor School justify the change.
Outdoor School serves every sixth grader in the District. In 2000-01, approximately 3,450 6th grade students from Portland Public Schools attended Outdoor School and approximately 690 high school students served as student leaders. The science instruction at Outdoor School is an integral part of the 6th grade science curriculum and Outdoor School activities are also aligned with the 8th grade science content standards. Outdoor School also provides high school students who serve as student leaders with an opportunity to demonstrate mastery of some of the steps toward meeting their CIM/CAM benchmarks. The annual evaluation from Superintendents of participating districts in 2000-01 established a ranking of Outdoor School between "Very satisfied" and "extremely satisfied."
Outdoor School is a unique introduction to environmental education. In addition (and frequently overlooked) are the valuable team-building and diversity training aspects of the program (groups attending Outdoor School are deliberately mixed to expose city kids to suburban kids; wealthier and poorer communities; communities of color and European-American communities). Students attending as sixth graders frequently return in high school as part of the teaching staff, adding continuity to the experience.
By contrast, this year Green Thumb serves only 79 high school students (five days per week for two hours per day for a year) and 308 middle school students (five days per week for one hour per day for a semester). These numbers are down from 98 and 487 respectively in 2000-01. In addition, these students have transit time from their schools, which adds non-instructional time into their school days and adds transport costs (30% of which – $16,068 – are not reimbursed). After listening to staff testimony, it appeared that this program offered an alternative setting for hands-on applied learning and an opportunity to meet CAM requirements. However, the education rationale for Green Thumb was either not well established, or has shifted from its original intent into a quasi-alternative ed program, but without linking Green Thumb to actual alternative education needs or testing its effectiveness in this area. As with Moshi Moshi, the Committee is only proposing eliminating general fund support for Green Thumb, and does not rule out the acquisition of outside funds to maintain this program. Unlike Moshi Moshi, however, the Board needs to consider that Green Thumb sits on a desirable parcel of land for development (or sale to a private or public agricultural concern), and offers the possibility of bringing in funds to the District if the Real Estate Trust was to be allowed to maximize its value.
The cost of Outdoor School is $880,000. The Committee would find this funding by the closure of Green Thumb ($500,000 — reflecting that portion of Green Thumb not already slated for reductions in the Interim Superintendent’s proposed budget), the elimination of supplemental payments to workers off work for compensable injuries ($330,000),* and a cut of $110,000 in the athletics budget. (This leaves $60,000 for return to the general fund for contingency and/or reserve purposes.)
The athletics cut is intended to mirror the cost of a specific sport — golf — although the Committee is not mandating, only recommending to staff, that that is where the cut should be made. Golf has the fewest participants of any sport (170, compared to 180 for dance and more than 300 for every other sport), and the highest per student cost ($647/student) after adjusting for a Portland Parks grant that can be shifted to other purposes (and an above-median $478/student even with the grant factored in). There is no Title IX issue — meaning no impact on the adequate funding of women’s athletics — and it is not believed that this sport is a "dropout prevention" sport at the level of most others.
The issue of supplemental workers compensation payments relates to a collectively bargained obligation of the district to make up the difference between what is paid to a worker with a compensable injury by the workers compensation system — two thirds of their pay — and their actual pay. The issue that arises is that WC payments are not taxable, and the result is that any worker whose actual taxes, inclusive of state and federal taxes and social security are more than 33%, is actually getting paid more to stay home than to return to work. While one member of the Committee (Abrams) had hoped to determine a way, rather than eliminating these payments, to cap them at the level of actual take home pay, the Committee recognizes the likely impossibility of calculating that for every compensably injured worker, and unanimously recommends this change.
- Rejected Suggestions.
Reduction of Custodial Contracting Out. The Committee voted down a proposal to raise the amount in the custodial budget from $10.1 million to $11.7 million, to be accomplished by taking that money from funds identified on page 11 of the Interim Superintendent’s proposed budget as designed to "allow flexibility and options as we enter into conversations with all or our employees." The motion would also have de-coupled contracting out and the savings, requiring only that the $2.9 million in savings be achieved. The vote was two-to-one (Abrams dissenting).
The key challenge to the District remains to maximize the value of our services to children with scarce resources. To that end, we need to establish an evaluation process for all educational programs that lets the Board know whether money is being spent efficiently and effectively, both in absolute terms and relative to expenditures on other programs. While making absolute comparisons may not be possible in many instances, this is a valuable and needed tool that we currently lack. The CBRC joins the committee in recommending that a priority over this next year is the development and institution not only of such a model, but the institutionalization of such evaluations by education staff of all programs on an ongoing basis. Such evaluation would better allow for linkage of programs to overall goals, and for the implementation of strategic plan targets.
Initial areas for application of such performance measurements include special focus programs, alternative education programs (within and outside the District), use of desegregation funds, professional and technical programs (including funding levels for Vocational Village and Benson High School), and charter schools.Conclusion.
No one should be satisfied with the state of PPS’s finances. They continue to reflect an abdication of responsibility by our state government for the future or our children. But if this budget is adopted and implemented, it offers increased efficiencies, preserved priorities, improved allocation of resources, and improved communications with the public. These are no small tasks for a year in which we will lose over 10% of our general fund resources. The Committee recommends that the full Board, acting as the District’s Budget Committee, accept the Interim Superintendent's proposed budget as modified, first by his own procedural amendment to align the budget detail with his budget message, and then by the five amendments described above.
Respectfully Submitted,Finance and Operations Committee
Marc Abrams, Chair
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